DUBAI: Amazon’s acquisition of online retail site Souq.com marks a “coming-of-age” of the Middle East ecommerce sector, technology experts said.
Souq plans to expand its workforce and operations after the US market leader clinched a deal to buy 100 percent of the Middle East player, executives from both firms said.
Amazon had walked away from talks with Souq.com earlier this year, but it reportedly came back with an offer of $650 million.
Amazon and Souq.com said earlier on Tuesday they had agreed on the takeover, despite an eleventh-hour bid by Dubai billionaire Mohamed Alabbar’s Emaar Malls to cut in with an offer it said was worth $800 million.
Executives have not disclosed the value of the Amazon deal, which adviser Goldman Sachs called “the biggest-ever technology M&A transaction in the Arab world.”
Sources with knowledge of the takeover said Amazon was paying less than Emaar’s offer, making it lower than Souq.com’s $1 billion valuation when it sought funding last year.
One source said Souq.com would have broken an exclusivity agreement with Amazon if it accepted Emaar’s bid at this stage.
“Amazon is a great fit with us. We have a lot of common values and it is all about innovation, technology and the type of customer experience and thinking that Amazon has,” Souq.com Co-Founder and Chief Executive Ronaldo Mouchawar told Reuters.
Technology expert Matthew Reed, practice leader for the Middle East and Africa at Ovum in Dubai, said that the deal was significant.
“The Amazon deal to buy Souq.com marks a coming-of-age moment for e-commerce in the Middle East,” Reed told Arab News.
“Currently, e-commerce in the region is less advanced than might be expected the given the relative affluence and high levels of broadband connectivity in the GCC states. But the arrival in the region of a global leader such as Amazon should help to develop and grow the e-commerce sector here.”
The deal will help grow an already major player in the Middle East online retail sector. Alabbar himself has advanced plans for the launch of Noon, slated as a $1 billion portal that will have a big initial focus on fashion and luxury products.
“Assuming the deal goes ahead, Noon will face tougher competition than it might have been expecting, as in Amazon it will be up against what many see as the world’s leading e-tailer,” Reed said.
P.K. Gulati, a Dubai-based technology investor, said that the Amazon-Souq deal was “awesome”.
“I think it’s great for the ecosystem — it’s great as a role-model deal, in the sense of people thinking that they can do it,” Gulati – who has made about 15 investments worldwide, mainly in Silicon Valley and India – told Arab News.
It was also remarkable given Amazon’s track record in business, he added. “Amazon has a reputation of not buying companies — rather, of making them.”
Gulati said that Alabbar’s unsuccessful 11th-hour bid for Souq simply came too late.
“Putting a counter-bid on a Friday was in my opinion probably too late… I think the deal was already done already by then.”
Noon may become a future player in the space, but such sites typically take some time to take off, Gulati added. It typically “takes three to five years for a platform to stabilize and become something which people like,” he said.
Souq.com, founded in 2005, stocks 8.5 million items on its website and generates about 50 million monthly visits, the site’s CEO Mouchawar told Reuters. It delivers to the six Gulf Arab states and Egypt.
Mouchawar said there was scope to expand the business with Amazon and to increase the 3,000-strong workforce to boost Souq.com’s reach, without saying by how many it would rise.
“We will continue to invest in our segment and grow our markets,” he said at Souq.com’s Dubai headquarters.
Despite its young, tech-savvy population, shoppers in the Middle East still prefer to shop in stores. Online retail accounts for less than 1 percent of total sales in the Middle East, according to market researcher Euromonitor International.
“We want to figure out how to grow the team here. If we’re going to grow the business we have to grow logistics, we have to grow technical development,” Amazon Senior Vice President Russ Grandinetti said.
In a deal document seen by Reuters, Goldman said the acquisition would accelerate Amazon’s entry into “attractive Middle East countries with significant growth potential.”
After the Amazon takeover, Middle East consumers will be able to buy products available on Amazon.com through Souq.com, and Middle East merchants will have access to a wider market via Amazon’s network.
The acquisition is expected to close later this year.
Souq.com’s current shareholders include South Africa’s Naspers Ltd. and Tiger Global Management.
The Amazon deal was backed by the Dubai government, which wants to use technology to expand its regional retail footprint.
Dubai’s Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum said in a statement it showed the city state’s position “as a regional and global hub for the world’s biggest and leading organizations.”
Amazon’s acquisition of Souq.com is seen as significant for the Middle East’s nascent tech sector.
“This is effectively a vote of confidence in the region. You have a major American company going into a digital company in the region,” said Fadi Ghandour, founder Dubai-listed logistics firm Aramex and a prominent venture capitalist in the Middle East.
— With Reuters
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
Amazon deal to buy Souq.com a ‘coming-of-age’ of Mideast ecommerce
Iraq’s water reserves lowest in 80 years: official
- Iraqi spokesperson of the Water Resources Ministry Khaled Shamal says the country hasn't seen such a low reserve in 80 years
- Iraq is considered by the United Nations to be one of the five most impacted countries by climate change
BAGHDAD: Iraq’s water reserves are at their lowest in 80 years after a dry rainy season, a government official said Sunday, as its share from the Tigris and Euphrates rivers shrinks.
Water is a major issue in the country of 46 million people undergoing a serious environmental crisis because of climate change, drought, rising temperatures and declining rainfall.
Authorities also blame upstream dams built in neighboring Iran and Turkiye for dramatically lowering the flow of the once-mighty Tigris and Euphrates, which have irrigated Iraq for millennia.
“The summer season should begin with at least 18 billion cubic meters... yet we only have about 10 billion cubic meters,” water resources ministry spokesperson Khaled Shamal told AFP.
“Last year our strategic reserves were better. It was double what we have now,” Shamal said.
“We haven’t seen such a low reserve in 80 years,” he added, saying this was mostly due to the reduced flow from the two rivers.
Iraq currently receives less than 40 percent of its share from the Tigris and Euphrates, according to Shamal.
He said sparse rainfall this winter and low water levels from melting snow has worsened the situation in Iraq, considered by the United Nations to be one of the five countries most vulnerable to some impacts of climate change.
Water shortages have forced many farmers in Iraq to abandon the land, and authorities have drastically reduced farming activity to ensure sufficient supplies of drinking water.
Agricultural planning in Iraq always depends on water, and this year it aims to preserve “green spaces and productive areas” amounting to more than 1.5 million Iraqi dunams (375,000 hectares), said Shamal.
Last year, authorities allowed farmers to cultivate 2.5 million dunams of corn, rice, and orchards, according to the water ministry.
Water has been a source of tension between Iraq and Turkiye, which has urged Baghdad to adopt efficient water management plans.
In 2024, Iraq and Turkiye signed a 10-year “framework agreement,” mostly to invest in projects to ensure better water resources management.
Israeli strikes kill 23 in Gaza, including a journalist and rescue service official
- Israeli fire kills at least 23 people in Gaza
- Israel controls 77 percent of Gaza Strip, Hamas media office says
CAIRO: Israeli military strikes killed at least 23 Palestinians across the Gaza Strip on Sunday, including a local journalist and a senior rescue service official, local health authorities said.
The latest deaths in the Israeli campaign resulted from separate Israeli strikes in Khan Younis in the south, Jabalia in the north and Nuseirat in the central Gaza Strip, medics said.
In Jabalia, they said local journalist Hassan Majdi Abu Warda and several family members were killed by an airstrike that hit his house earlier on Sunday.
Another airstrike in Nuseirat killed Ashraf Abu Nar, a senior official in the territory’s civil emergency service, and his wife in their house, medics added.
There was no immediate comment by the Israeli military.
The Hamas-run Gaza government media office said that Abu Warda’s death raised the number of Palestinian journalists killed in Gaza since October 7, 2023, to 220.
In a separate statement, the media office said Israeli forces were in control of 77 percent of the Gaza Strip, either through ground forces or evacuation orders and bombardment that keeps residents away from their homes.
The armed wing of Hamas and the Islamic Jihad said in separate statements on Sunday that fighters carried out several ambushes and attacks using bombs and anti-tank rockets against Israeli forces operating in several areas across Gaza.
On Friday the Israeli military said it had conducted more strikes in Gaza overnight, hitting 75 targets including weapons storage facilities and rocket launchers.
Israel launched an air and ground war in Gaza after Hamas militants’ cross-border attack on October 7, 2023, which killed 1,200 people by Israeli tallies with 251 hostages abducted into Gaza.
The conflict has killed more than 53,900 Palestinians, according to Gaza health authorities, and devastated the coastal strip. Aid groups say signs of severe malnutrition are widespread.
Israeli military says it intercepted missile from Yemen
- Yemen’s Iran-aligned Houthis have continued to fire missiles at Israel in what they say is solidarity with Palestinians in Gaza
CAIRO: The Israeli military said on Sunday that it had intercepted a missile launched from Yemen toward Israel.
Sirens sounded in several areas in the country, the Israeli military said earlier.
Since the start of the Israel-Hamas war in October 2023, Yemen’s Iran-aligned Houthis have continued to fire missiles at Israel in what they say is solidarity with Palestinians in Gaza.
Most of the group’s missile have been intercepted or have fallen short.
The Houthis did not immediately comment on the latest missile launch.
Syria to help locate missing Americans
DAMASCUS: Syria’s new authorities have agreed to help the United States locate and return Americans who went missing in the war-torn country, a US envoy said on Sunday.
“The new Syrian government has agreed to assist the USA in locating and returning USA citizens or their remains. The families of Austin Tice, Majd Kamalmaz, and Kayla Mueller must have closure,” US special envoy for Syria Tom Barrack wrote on X.
Turkiye, PKK must both change for peace: former militant
- For years, Yuksel Genc was a fighter with the Kurdish rebel group
- Genc herself joined the militants in 1995 when she was a 20-year-old university student in Istanbul
DIYARBAKIR, Turkiye: “When you try and explain peace to people, there is a very serious lack of trust,” said Yuksel Genc, a former fighter with the PKK, which recently ended its decades-long armed struggle against the Turkish state.
Talking over a glass of tea in a square in Diyarbakir, the biggest city in Turkiye’s Kurdish-dominated southeast, this 50-year-old former fighter with long auburn curls is worried about how the nascent rapprochement between Ankara and the Kurdistan Workers’ Party (PKK) will play out.
“The guerillas are sincere, but they don’t think the state is,” said Genc, her words briefly interrupted by the roar of a fighter jet flying overhead.
“They think the government does not trust them.”
For years, she was a fighter with the Kurdish rebel group, which on May 12 said it would disarm and disband, ending a four-decade armed struggle against the Turkish state that cost more than 40,000 lives.
The historic move came in response to an appeal by its jailed founder Abdullah Ocalan, arrested in 1999 and serving life in solitary ever since on a prison island near Istanbul.
Genc herself joined the militants in 1995 when she was a 20-year-old university student in Istanbul.
“At that time, many Kurdish villages were being burnt down, and we were constantly hearing about villages being evacuated, people being displaced and unsolved murders,” she said.
She described it as “a time of terrible repression.”
“You felt trapped, as if there was no other way than to join the guerrillas,” she said.
Four years later, after years in exile, Ocalan was snatched by Turkish commandos in a Hollywood-style operation in Nairobi.
“Ocalan’s capture provoked a deep sense of rage among the guerrillas, who feared it would mean the Kurdish cause would be destroyed,” she said.
But it was Ocalan himself who called for calm and insisted it was time for the Kurdish question to be resolved democratically. He urged his followers to go to Turkiye, hand over their weapons and seek dialogue.
“He thought our arrival would symbolize (the PKK’s) goodwill, and persuade the state to negotiate.”
Genc was part of the first so-called “groups for peace and a democratic solution” — a group of three women and five men who arrived in Turkiye on October 1, 1999 on what they knew would be a “sacrificial” mission.
After a long march through the mountains, they arrived in the southeastern village of Semdinli under the watchful eye of “thousands” of Turkish soldiers huddled behind rocks.
Handing over their weapons, they were transferred to the city of Van 200 kilometers (140 miles) to the north where they were arrested.
Genc spent the next nearly six years behind bars.
“For us, these peace groups were a mission,” she said. “The solution had to come through dialogue.”
After getting out, she continued to struggle for Kurdish rights, swapping her gun for a pen to become a journalist and researcher for the Sosyo Politik think tank.
Even so, her writing earned her another three-and-a-half years behind bars.
“Working for peace in Turkiye has a cost,” she said with a shrug.
When Recep Tayyip Erdogan became prime minister in 2003, there was hope for a new breakthrough. But several attempts to reach an agreement went nowhere — until now.
“Like in 1999, the PKK is moving toward a non-violent struggle,” she said.
“But laying down arms is not the end of the story. It is preparing to become a political organization.”
Resolving the decades-long conflict requires a change on both sides however, said Genc.
“It essentially involves a mutual transformation,” she argued.
“It is impossible for the state to stick with its old ways without transforming, while trying to resolve a problem as old and divisive as the Kurdish question.”
Despite the recent opening, Genc does not speak of hope.
“Life has taught us to be realistic: years of experience have generated an ocean of insecurity,” she said.
“(PKK fighters) have shown their courage by saying they will lay down their weapons without being defeated. But they haven’t seen any concrete results.”
So far, the government, which initiated the process last autumn, has not taken any steps nor made any promises, she pointed out.
“Why haven’t the sick prisoners been released? And those who have served their sentences — why aren’t they benefiting from the climate of peace?“
And Ocalan, she said, was still being held in solitary despite promises of a change in his situation.
The number of people jailed for being PKK members or close to the group has never been revealed by the Turkish authorities.
“The fact that Ocalan is still not in a position to be able to lead this process toward a democratic solution is a major drawback from the militants’ point of view,” she said.
“Even our daily life remains totally shaped by security constraints across the region with the presence of the army, the roadblocks — all that has to change.”
